Commercial Real Estate
Be Wary of Real Estate Closings When Appealing Judgments
The Supreme Court of Virginia recently issued an opinion serving as a cautionary tale for judgment debtors appealing judgments against them while concurrently seeking to pass clear title on unrelated real estate sales. That case is Sheehy v. Williams, 2020 Va. LEXIS 139 (decision issued Nov. 25, 2020). In Sheehy, judgment was entered against Ms. Sheehy for $50,845.18, which she appealed. While her appeal was ...
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The Short Guide to Short-Term Rentals: Norfolk, VA Edition
Short-term rentals have become increasingly popular with Hampton Roads visitors and a big source of income for local property owners. Many guests in the Hampton Roads area are finding accommodations on websites like AirBnb.com, HomeAway.com, and Tripping.com, instead of staying in traditional hotels and resorts. In 2018, Airbnb hosts in the City of Norfolk alone generated 4.5 million dollars of revenue and hosted 31,000 guests ...
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The Short Guide to Short-Term Rentals: Richmond, VA Edition
Every day, short-term rentals play host to international visitors around the world. Whether for business or pleasure, short-stay accommodation websites like AirBnB.com, HomeAway.com, Tripping.com, and more have replaced traditional motel and hotel stays for many travelers of all ages. Naturally, because this type of lodging is coordinated by individuals and can generate substantial income, state and local governments have sought to regulate and tax these ...
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Lease Issues in the COVID-19 Environment [Part 2]
The COVID-19 crisis has significantly impacted the ability of parties to satisfy their respective obligations under their commercial leases. As mentioned in Part 1 of this series, many parties are discovering that the language of force majeure clauses often lacks the specificity to adequately address this unique situation. Part 2 of this series explores the approaches being taken by parties to resolve the practical issues ...
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Lease Issues in the COVID-19 Environment [Part 1]
In the current COVID-19 crisis, attorneys are receiving numerous questions from landlords and tenants, as to their respective contractual obligations under their commercial leases. Tenants are carefully analyzing the provisions of the lease to determine if any provisions therein could excuse or delay performance, particularly as it relates to the obligation to pay rent. This article is Part 1 of a 2-article series and summarizes ...
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Loan Issues In the COVID-19 Environment
In the current COVID-19 environment, many borrowers are asking whether the government will grant borrowers any relief from payment obligations under their commercial loans. There is a general reluctance of governmental authorities to interfere with private contracts, which would include most loan documents. Accordingly, loan payments are contractual obligations for which borrowers will generally remain responsible. At present, there does not appear to be any ...
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Completing Commercial Real Estate Transactions in the COVID-19 Environment
How do I get my commercial real estate transaction closed in the COVID-19 environment? Many transactions are at a standstill, particularly if lenders are overwhelmed or are having difficulty underwriting loans with economic conditions in a state of flux. However, for those deals past the due diligence period and near closing, it may be possible to still complete the transaction through creatively implemented closing logistics ...
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COVID-19, Leasing, and Force Majeure Clauses
To date, COVID-19 has led to the forced closures of many businesses and commercial spaces worldwide, both temporarily and permanently. While some can adapt and continue to work in safe numbers or controlled environments, others have been left with no alternatives, resulting in unemployed and unproductive workers and workspaces. So, what does this mean for commercial leasing relationships now that once-profitable businesses have stalled due ...
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Fannie Mae and Freddie Mac will grant mortgage forbearance for Borrowers who suspend evictions for renters in multifamily properties with loans backed by Fannie Mae or Freddie Mac
The Federal Housing Finance Agency announced that Fannie Mae and Freddie Mac will offer multifamily property owners mortgage forbearance with the condition that they suspend all evictions for renters unable to pay rent due to the impact of coronavirus (“COVID-19”). The eviction suspensions are in place for the entire duration of time that a property owner remains in forbearance. The forbearance is available to all ...
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Pre-laying Foundation for Lender Consent to Future Leasing Activity
No landlord wants to potentially lose a financially viable tenant merely because the landlord’s lender delayed in approving the proposed lease. Accordingly, it is important to negotiate certain parameters into the loan documents, under which the landlord’s lender pre-approves leases that satisfy certain predetermined criteria. Lenders are often receptive to language stating that only a “Major Lease” needs to be first approved by the lender. ...
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Pre-laying Foundation for Lender Consent to Future Leasing Activity
No landlord wants to potentially lose a financially viable tenant merely because the landlord’s lender delayed in approving the proposed lease. Accordingly, it is important to negotiate certain parameters into the loan documents, under which the landlord’s lender pre-approves leases that satisfy certain predetermined criteria. Lenders are often receptive to language stating that only a “Major Lease” needs to be first approved by the lender. ...
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Anticipatory Drafting: Documenting the Release Parcel on the Front End
Borrowers, at the initial loan closing of an acquisition of investment real estate, often have plans to later develop and/or convey a smaller portion of the real estate collateral. However, depending on the size and nature of the lender, and the importance of the subject parcel, it may be expensive and/or time consuming to obtain the lender’s consent to release the parcel from the loan. ...
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Guarantor Provisions to Negotiate in Non-Recourse Financing
Many commercial real estate loans are “non-recourse,” which means in general terms that foreclosing on the real estate securing the loan is the lender’s sole remedy for a borrower’s failure to repay the loan. The lender is generally prohibited from suing the borrower entity or any individual guarantors to recover the unpaid debt or any deficiency remaining after foreclosure. However, there certain types of defaults ...
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Preemptive Wordsmithing: Considering Future Alterations of Commercial Property at the Outset
Borrowers often envision future alterations to enhance the economic value of the commercial real estate asset, when closing the initial loan. Such alterations can be in the form of capital improvements, tenant improvements, renovations, and/or expansions of the facility. At term sheet negotiation, the borrower should consider the long-term and short-term plans for the property, so that the loan contains appropriate flexibility to deal with ...
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Qualified Opportunity Zones: A Reciprocal Vehicle to Minimize Capital Gains
The recently adopted Qualified Opportunity Zone Program (QOZ), introduced in 2017’s Tax Cuts and Jobs Act, is emerging as a potentially significant federal economic development tool that could improve the outcomes of distressed communities throughout the United States. Through the QOZ program, investors can inject capital into government-designated, economically-depressed communities and promote long-term economic growth through a variety of investment vehicles. The program’s benefits include ...
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Business and Commercial Real Estate Attorneys Named to the 2020 Best Lawyers® list and Receive the “Lawyer of the Year” distinction
Vandeventer Black LLP is pleased to announce that two of its Business and Commercial Real Estate (CRE) legal team have been included in the 2020 Edition of The Best Lawyers in America. Since it was first published in 1983, Best Lawyers has become universally regarded as the definitive guide to legal excellence. Best Lawyers has published their list for over three decades, earning the respect of the ...
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Commercial Real Estate Attorney Ray W. King Returns to Vandeventer Black
Vandeventer Black LLP is pleased to announce the return of Ray W. King to the firm’s Norfolk office as an Of Counsel attorney. King will continue to concentrate his practice on commercial real estate, real estate litigation, and commercial foreclosures. His commercial real estate practice encompasses all aspects of commercial real estate transactions including representing clients in the purchase, sale, financing, and defeasance of high-rise ...
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Tools of Mutual Benefit: The Scope and Purpose of Lease Guaranties
A guaranty is an agreement under which an individual (or entity) agrees to satisfy the underlying obligations of a primary obligor if such obligor defaults on the underlying obligation. With respect to a lease guaranty, the guarantor is often the principal or owner playing a key role in the tenant entity or a parent/affiliate of the tenant. There are several reasons why a lease guaranty ...
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Tools of Mutual Benefit: The Scope and Purpose of Lease Guaranties
A guaranty is an agreement under which an individual (or entity) agrees to satisfy the underlying obligations of a primary obligor if such obligor defaults on the underlying obligation. With respect to a lease guaranty, the guarantor is often the principal or owner playing a key role in the tenant entity or a parent/affiliate of the tenant. There are several reasons why a lease guaranty ...
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Virginia and Fourth Circuit Case Summaries
In PNC Bank N.A. v. Dominion Energy Mgm’t Inc., 2018 U.S. Dist. LEXIS 62577 (E.D. Va. April 12, 2018), the Eastern District of Virginia held that an individual has the opportunity and capacity to read loan documents cannot avoid liability by claiming fraudulent inducement based on oral statements allegedly made by bank representatives different from the loan documents’ terms. PNC loaned funds and extended lines ...
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